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Partnerships for Recovery: – Speeding up the Pacific’s Connectivity

Responding to the challenges posed by the telecommunications infrastructure deficit in the Pacific will enable our neighbours to take full advantage of the digital economy.

The Australian Infrastructure Financing Facility for the Pacific (AIFFP) became operational in July 2019. The AIFFP was established to respond to the infrastructure priorities across the Pacific and Timor-Leste. The Facility partners with governments and the private sector in the region to provide $2 billion of financing for high quality infrastructure projects primarily in energy, water, transport, and telecommunications. This funding is additional and complementary to Australia ’s bilateral and multilateral infrastructure investments funded under the aid program.

Prior to COVID-19, the Asian Development Bank estimated that over USD30 billion of investment was needed by 2030 to meet the Pacific ’s infrastructure needs. COVID-19 has exacerbated this situation, eroding social and economic gains, increasing fiscal pressures, and causing GDP decline across the region. Australia ’s 2016 Pacific Step-up strategy positions us well to work with our region to address these challenges.

Energy and telecommunications connectivity have been a key theme of the AIFFP to date. Supporting faster, cheaper, and more reliable internet connection throughout the region is an effective tool to communities and businesses accessing the full potential of the digital economy.

Building on Australia ’s support for the 4,700km Coral Sea Cable System connecting Sydney, Port Moresby and Honiara, the AIFFP is now working with Japan, the United States and Palau to build a fibre optic submarine cable connecting Palau to a USA-Singapore cable, ensuring reliable and secure digital connectivity.

Photo of Yolanda in Grade 10 using a computer with other students using computers in the background.
Yolanda, Grade 10, using her computer. Credit: AIFFP.

The cable marks the first project under the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific, and our collective efforts provide increased opportunity to meet the high demand for quality infrastructure investment in the region.

The AIFFP is also working with Timor-Leste to support cheaper and more reliable internet connectivity with the design of an undersea cable between our two countries. This cable will be a first for Timor-Leste, which is currently reliant on significantly more expensive and slower satellite connection. The benefits of an undersea cable will include local job creation, a stimulated economy and increased access to global resources, including increased investment from overseas and economic development.

The AIFFP has also approved financing for PNG ’s biggest utility solar plant and 22km of transmission line in Solomon Islands connecting the capital city ’s grid to a new hydropower station.

The AIFFP engages with partners in the public and private sectors to identify quality infrastructure projects that can deliver on the needs of Pacific nations and the rigour Australian infrastructure is renowned for.

Our team works with Pacific governments to plan, assess, and finance projects, leveraging AUD1.5 billion of loan financing and an AUD500 million grant pool. Sovereign loans attract interest commensurate with multilateral development bank rates, while loan financing to the private sector sees loans priced at market rates. In addition to financing projects, the AIFFP generates opportunities for industry in the delivery of the projects through working with sovereign partners on procurement for construction of the projects.

Potential AIFFP investments are rigorously assessed and the AIFFP works closely with project proponents to ensure they comply with AIFFP ’s values of quality, gender equality and social inclusion, climate and disaster resilience and appropriate safeguarding. In line with the Australian government ’s development policy, Partnerships for Recovery – Australia ’s COVID-19 Development Response, the AIFFP has increased its focus on local jobs and opportunities for the private sector in the Pacific. This will contribute to much needed economic recovery as Australia and our Pacific and Timor-Leste family work together to recover and rebuild.

The Australian government shares a vision of prosperity with our Pacific family, which we know the Australian business community holds too.

To find out about the opportunities for Australian companies to work with the AIFFP, visit:

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